Testimony on H.R. 1833, Tribal Self-Governance by John Callahan
Assistant Secretary for Managament and Budget
U.S. Department of Health and Human Services

Before the Senate Indian Affairs Committee
October 7, 1998

Chairman Campbell, Vice Chairman Inouye, and Members of the
Committee: Good morning. I am John Callahan, Assistant Secretary
for Management and Budget at the Department of Health and
Human Services. I am pleased to appear before the Committee
today to present the Department's views on H.R. 1833, the Tribal
Self-Governance Amendments of 1998.

The Administration supports the spirit and intent of the Tribal
Self-Governance Amendments. H.R. 1833 is consistent with our
goal of providing maximum participation of tribes in the
development and management of Indian programs.

As American Indian and Alaska Native people know well,
recognition of the sovereignty of tribal governments and respect for
Indian self-determination by the United States has followed a
complex and sometimes inconsistent path. Yet, over the past three
decades, effective advocacy by the nation's tribes and progressive
changes in federal law and policy have reaffirmed the
federal government's commitment to Indian self-determination and
tribal self-governance.

The Clinton Administration firmly supports strengthened
relationships between the United States and the nation's tribal
governments. At the U.S. Department of Health and Human Services, we
have responded to this mandate through a number of important
initiatives. Under the leadership of Secretary Shalala and Deputy
Secretary Thurm, major components of the Department are fully
consulting with Indian tribes on matters that affect Indian people.
Other components are working diligently to improve their
consultation with tribes. Special efforts are being made to
support Tribal colleges and universities. These institutions,
chartered by tribal governments, play a vital role in providing higher
education opportunities to American Indian and Alaska Native
students and preparing them for future leadership and service to their
communities. The Department fully supports the Racial and Ethnic
Health Disparities Initiative contained in the current FY 1999
budget. This initiative seeks to eliminate disparities in six areas of
health status experienced by racial and ethnic minority populations
by the year 2000 while continuing the progress we have made in
improving the overall health of the American people.

Our increasing attention to tribal issues and improved consultation
with tribes has already yielded important results. As Deputy
Secretary Thurm reported to you in June, as the President
affirmed in August, and as Secretary Shalala stated in her recent
letter to Chairman Campbell, we are pleased to join with this
Committee in support of efforts to elevate the Director of the Indian
Health Service to the level of Assistant Secretary within the
Department. This, and the other important policy initiatives, grows
out of our respect for the tribal governments and our deep
commitment to the government-to-government relationship between
the United States and the nation's Indian tribes.

These principles have also guided us in our consideration of H.R.
1833. From the bill's introduction, through its consideration by the
House Resources Committee, and in follow-up working sessions to
discuss additional changes both before and after consideration by the
full House, we have given the Tribal Self-Governance Amendments
our most thoughtful consideration. We have invited representatives
of self-governance tribes to brief Department staff, not only on the
specific goals of H.R. 1833, but also on the essential principles and
values that are the foundation of self-governance.

Over the past year, HHS officials and senior staff have attended
several tribal conferences and meetings that have addressed the issue
of self-governance. Deputy Secretary Thurm, accompanied by a
large delegation from the Department, attended the 1997 National
Congress of American Indians annual meeting in Santa Fe. During
the past year, I have personally met with high level elected tribal
officials on budget issues related to self-governance. Through these
meetings, conferences, and numerous other occasions for
consultation, we have gained a deeper understanding of
self-governance, its importance to the nation's tribes, and our
commitment to facilitate and support it whenever appropriate.

At the same time, there are a number of tribes that have no plan to
enter into self-governance within the foreseeable future. Our
commitment to provide for the health of those tribes can be
no less than our commitment to promote self-governance. The
needs of neither group of tribes can take priority in the allocation of
the IHS budget.

The IHS Self-Governance Demonstration has been a success. It has
demonstrated that Indian tribes are the most knowledgeable about
the needs within their communities. As the decision-makers closest
to those needs, tribal leaders have the central role in setting priorities
and allocating resources. Through this Demonstration, tribes have
established a clear record of accomplishment and success.
Consequently, we strongly support making self-governance
authority permanent within the IHS, so long as these changes
continue to allow the Department and the IHS to perform inherent
functions and to maintain trust responsibility to all tribes.

H.R. 1833 was passed by the House on October 5, 1998. While we
did not object to passage of the bill as amended by the Committee
substitute, the Administration noted that certain concerns
remained. In terms of specific provisions, the bill passed by the
House reflects the collaborative efforts of all parties to work toward
consensus legislation. Significant progress was made to
address problems within earlier versions of H.R. 1833, and we will
continue to work with the Senate and representatives of tribal
governments to address the remaining issues. For example,
we have been advised by the Department of Interior that it has
serious concerns regarding the definition of the term "inherent
Federal functions" included in the version passed by the House.
Because "inherent Federal functions" are best determined on a case
by case basis, the Department of Interior recommends that the term
not be defined in statute. It also recommends limiting the
application and interpretation of H.R. 1833 to title V and the Indian
Health Service.

We observe that section 513 includes language on the budget
request. The Administration reserves its prerogative to decide what
it includes in its annual budget request, but we will work
with Congress to provide information needed to make decisions
about funding levels for the Indian Health Service. To be able to
identify total Indian health funding needs, we also suggest
adding the words, "as clearly identified and" after "shall be" in
section 508(j).

Application of the Prompt Payment Act to a relationship between
governments may not be appropriate since this act is geared to
federal payments to vendors for goods and services. The
Cash Management Improvement Act, however, which establishes
equity as the guiding principle for cash management purposes may
be more appropriate toward ensuring timely transfer and
expenditure of program funds.

In working sessions leading up to consideration by the full House,
HHS identified concerns with language authorizing waivers of
federal regulations. We believe that parameters for the waiver
of regulations must be unambiguous, and that waiver authority not
be so broad that it would extend to program regulations best
addressed under proposed title VI. We support waiver
authority for regulations promulgated under the Indian
Self-Determination and Education Assistance Act, the Indian Health
Care Improvement Act, and other laws that apply directly to
programs operated by or through the Indian Health Service. While
we believe that we have reached an "agreement in principle" on this
matter, we note that the version of the bill passed by
the House does not fully address our concerns. It is clear, though,
that this version reflects substantial progress over earlier versions of
H.R. 1833.

H.R. 1833 has been strengthened and improved in important ways.
As in the original bill, the current version allows compacting tribes
autonomy and flexibility in redesigning and consolidating programs.
Language has been added to the current version that addresses
protection of beneficiaries or otherwise eligible groups who, because
of consolidation or redesign, risked losing eligibility and being
denied services.

We are pleased that previous Administration concerns regarding the
negotiated rulemaking process under the new title V have been
resolved in the version of H.R. 1833 adopted by the
House. Early versions limited the ability of the Secretary to fully
exercise the authority conferred upon her by both the President and
Congress. Under those earlier provisions, the Secretary would have
been prohibited from publishing rules that had not been approved by
the negotiated rulemaking committee. In response to our concerns,
this provision was deleted from the bill. Mr. Chairman, we are
aware of the desire - and right - of the self-governance tribes to
participate as full partners in negotiated rulemaking and other
deliberations affecting self-governance programs. We commit
ourselves to ensuring that the tribes are represented and
present "at the table" as important decisions and actions are
deliberated. Retention of the Secretary's role as the final determiner
of the Department's rules and policies will not diminish
the key role and maximum participation of the tribes.

HHS, along with many other federal Departments, strongly objected
to provisions in earlier versions of the bill allowing for trial de novo,
with full rights of discovery, in appeals of funding denial decisions.
Inclusion of trial de novo would unnecessarily interfere with the
cases currently pending before the courts. We are pleased this
provision was also deleted, and we were able to withdraw our
objections on this point.

Mr. Chairman, the U.S. Department of Health and Human Services is
firmly committed to considering, in partnership with the tribes and
other stakeholders, the expansion of a self-governance
demonstration to non-IHS programs. From the outset, we have
indicated our desire to undertake a study of the feasibility of
expanding self-governance. On the other hand, we were
seriously concerned about the establishment in H.R. 1833 of any
authority to proceed with demonstrations before a feasibility study
report was presented to Congress. Without a thorough
consideration of the numerous questions raised by this proposal,
implementation of any demonstrations would be premature and
ill-advised. In addition to assessing the impact self-governance will
have on all beneficiaries of our programs, questions related to the
funding of administrative and contract support costs must be
adequately addressed. The vast majority of our programs come
under the jurisdiction of Congressional Committees other than
Indian Affairs and Resources and many of these programs'
authorizing statutes have significant differences from the Indian
Self-Determination and Education Assistance Act. Mr. Chairman,
we have a responsibility to consult with those Committees in this
matter, and seek their advice regarding changes to programs under
their jurisdiction.

We are pleased that H.R. 1833, as adopted by the House, allows for
a process of consultation and study without establishing authority to
begin self-governance demonstrations in non-IHS programs. We
support the process of consultation, and requirements for a report to
Congress, as outlined in the current bill. We acknowledge our
responsibility to initiate consultation with the tribes, and in
partnership with them, to develop a format for broader consultations
with other entities. The current bill also allows for input from States
and other entities through a public comment process that preserves
the principal status of tribal governments and direct federal-tribal
relationships within the consultations.

Through this period of consultation and study, we will take seriously
our charge to carefully examine the authorizing legislation, mission
and operation of our programs in order to identify those that may be
suitable for inclusion in self-governance demonstrations, and to
suggest legislative or administrative actions necessary to implement
such demonstrations. At the same time, we will be able to examine
the impact of tribal self-governance in non-IHS programs on
other stakeholders, including State and local governments,
individual beneficiaries, and others.

Mr. Chairman, on behalf of the entire Department, I pledge to you,
this Committee, and the tribal leaders and guests gathered here, that
upon enactment of this enabling legislation, we will undertake this
study and engage in meaningful consultations with tribal
governments. We will consider the expansion of self-governance
beyond the IHS in a spirit of openness, integrity, and partnership.

Our increased support for H.R. 1833 is possible because of progress
made in frank and productive discussions with representatives of the
self-governance tribes. In every stage of this process, we have found
the tribal leaders to be open, thoughtful, and willing to consider
complex issues from many perspectives. Mr. Chairman, I wish to
acknowledge, for the record, the dedication and genuine
collaboration of the entire group of tribal leaders and representatives
who worked with Department staff to suggest mutually-agreeable
changes to H.R. 1833 that satisfied the great majority of our
concerns. Their efforts contributed to the framing of a bill that,
upon enactment, will be good for the tribes, good for IHS and the
Department, and good for the countless other stakeholders who also
benefit from our programs. Tribal leaders and their representatives
have our gratitude for their work on this measure.

In conclusion, I can state that we support making the IHS
self-governance authority permanent. We also support exploring the
expansion of self-governance to non-IHS programs and commit
ourselves to a process of consultation and study of this option, in
partnership with the tribes and other stakeholders. There remain
provisions of H.R. 1833 that we believe can be further
improved. However, the bill has been modified significantly since
introduction, and our most serious concerns have been addressed.
We look forward to working with Congress and the tribes
to make additional improvements and complete work on this
important legislation.

Mr. Chairman, this concludes my statement. Thank you for the
opportunity to appear before the Committee today. I would be
pleased to answer any questions you may have.